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Exports mean that LDV has turned a corner.

Byline: By John Cranage Automotive Correspondent

One hundred Birmingham-built Maxus vans valued at pounds 2 million are today stowed in the hold of a ship making its way across the Mediterranean to Turkey.

The cargo does more than boost British exports - it also shows that Maxus manufacturer LDV is back in business after last year's financial meltdown.

Already established as the third best-selling large van in the UK behind the Ford Transit and the Mercedes Sprinter, Maxus is driving into new export markets following its successful launch early in 2005.

LDV sales and marketing director Tony Lewis says major dealer groups are being signed up across Europe and exports to Malaysia are in the pipeline.

Maxus is undoubtedly the springboard to a secure future for the Washwood Heath company, whose workforce has shrunk from just under 1,000 to about 600 following the winter liquidity crisis that resulted in temporary administration.

Morale at the factory slumped following the lay-offs last December after a chronic cashflow problem - caused mainly by the higher costs associated with producing the sophisticated Maxus after years of knocking out cheap and cheerful Pilots and Convoys - became acute.

It didn't do much for employees when they found their final salary pension scheme shunted on to the new Pension Protection Fund (which has not said whether it will to pick up the tab) and that the deferred dividends on their shares would not be paid.

And market confidence was hit when it emerged that unsecured creditors would get nothing.

Only those with an input into the all-important Maxus got paid.

As hard as it was, that was the price that had to be paid for the lifeline offered by Sun European, the London-based affilitate of US private equity group Sun Capital Partners.

Employees and creditors aren't the only victims. Tax-payers have lost the pounds 24.2 million pumped into LDV by the Department of Trade and Industry to help pay for a factory revamp. And long-serving chief executive and former Midlands Businessman of the Year Allan Amey left six months ahead of his 60th birthday and planned retirement date.

He has been replaced, temporarily, by Charles P Megan, a Chicago-born corporate turnaround specialist installed by Sun with the job of kicking the wheels back on at LDV.

Sun took ownership of the company on December 16 after a controversial insolvency manoeuvre, called a prepackaged administration, that allowed it to re-emerge largely debt-free and with a new name, LDV Group Limited, within two hours of a High Court judge granting an administration order.

The Americans then went into purdah, meaning that official information about what was going on behind the walls of the Drews Lane site was all but impossible to obtain.

Rumours and speculation abounded, but hard facts were scarce.

That changed on Monday when Mr Megan, together with Sun European managing director Philip Dougal and Mr Lewis, invited this correspondent to an on-the-record briefing on the first 90 days of Sun's stewardship of this important Birmingham automotive company.

Mr Dougal and Mr Megan were keen to allay the city's fear that Sun is an asset-stripping, private equity vulture interested in a fast buck and a fast onward sale.

Not so, they said. They are here for the long haul, or at least until LDV Group is fully restored to financial health and an attractive proposition to a buyer able and willing to finance the next stage of its development.

"We were founded to invest in great companies in need of the operational expertise which we can bring to the table as well as new capital," Mr Dougall said.

"LDV fitted in with the hallmark of the type of investments we make.

"Speed and certainty were very much what was required, and we were able to move extremely quickly to resolve a difficult financial situation.

"We like the business because it has a proven and excellent product in the new Maxus and the derivates coming on line and a fantastic, state of the art facility here in Birmingham.

"We have no agenda or strategy other than that of selling vans profitably from Birmingham. We are not asset players, we are operational players."

Mr Megan said: "We are really excited about what is going on here. We have done a lot of work in the last 90 days."


LDV's new owners, Tony lewis, Charles Megan and Philip Dougall
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Title Annotation:Business
Publication:The Birmingham Post (England)
Date:Mar 22, 2006
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